“Privatizing” Public Assistance Applications Will Cost Texas $1 Billion in the Name of Efficiency

Wednesday, October 8th, 2008
by Gardner B.

When the current leadership of Texas came to power in 2003 they decided to try and privatize parts of state government in an attempt to save money.  Their biggest project was to turn over the new application process for social services, the Texas Integrated Eligibility Redesign System (TIERS), over to private industry.

Several employees of Governor Rick Perry helped design the application process for the project and then hired themselves out to Bermuda-based company, Accenture, which was bidding on the contract.  Not surprisingly, Accenture won the contract and started to develop and implement the system and 1000 state employees were about to be laid off.  However, Accenture proved to be incompetent and their pilot projects were such disasters that they were eventually let go and the state employees weren’t laid off.

As a result of this fiasco, Texas now has two applications systems for social services.  The old mainframe system and TIERS are both used to enroll applicants for social services.  A new report issued by the state auditor now says it will take $1 billion and 12 years to implement TIERS.  That cost is up from a $575 million estimated cost last year.  The report also said 20% of applicants to an assistance program had to wait more than the 30 days allowed by federal law to have their applications processed.

Privatization in Texas:  questionable contracting process, less efficient and costs more.  Isn’t that the way it’s supposed to work?